The 37-year-old is the latest veteran to sign a new agreement holding him to the club until June 30, 2012, as his current deal was set to expire next month.
"I am happy, as it's a dream to end my career at Milan. I don't think there were any alternatives, as what happened the other day at San Siro was worth so much," he said of their Scudetto party.
"The negotiations have never been about the economic issues, as there has always been a great rapport between us and we shared great victories.
"Everyone came together to make this dream come true of staying for another year. It's wonderful that there wasn't the slightest doubt, because we are united as men first and foremost."